Brazil to reschedule sale of Celg-D, cut price to lure bidders

BRASILIA/SAO PAULO Aug 16 (Reuters) - The Brazilian
government has rescheduled an auction to sell state-controlled
Centrais Elétricas de Goiás SA as potential bidders failed to
present some requirements within a deadline, signaling feeble
interest for the ailing power distributor.

In a statement, the Mines and Energy Ministry said some of
the companies that had shown preliminary interest in the company
known as Celg-D did not present the financial guarantees needed
to participate in the auction. The sale, which was scheduled for
Friday, was expected to raise at least 2.8 billion reais ($881
million).

Two lawmakers with direct knowledge of the sale process told
Reuters the government will likely reduce the minimum price for
Celg-D to around a minimum 2 billion reais to lure firm bids
when the process is resumed, probably in September.

Reuters reported in February that the government and
state-controlled power holding company Centrais Elétricas
Brasileiras SA, which owns 51 percent of Celg-D, had invited AES
Corp, Italy's Enel SpA and several Brazilian
power utilities to participate in the auction. Brazil's state
development bank BNDES and the World Bank's International
Finance Corporation are coordinating the process.

The suspension of the Celg-D auction, which some investors
saw as a litmus test for investor appetite for state asset sales
in Brazil's electricity industry, underscores the difficulties
facing an ambitious state asset divestment plan needed to help
narrow a record budget deficit this year.

Eletrobras, as the state power holding company is
commonly known, has put on the block stakes in several
distribution companies to focus on power generation and
transmission.

The remaining 49 percent in Celg-D is owned by the state of
Goiás through investment holding firm Cia Celg de Participações
SA. That stake is also for sale.